While the League voted against the mainstream German candidate Ursula von der Leyen for the powerful EU post, the 5-Star backed her this week in the European Parliament, with its support proving decisive in guaranteeing her promotion.
Deputy Prime Minister Luigi Di Maio, who heads 5-Star, said the League position risked isolating Italy, while League leader Matteo Salvini accused his partner of betraying ordinary voters after promising to bring radical change to Europe.
"There is a lack of trust, even at a personal level," Salvini told reporters during a visit to Finland, referring to his once-strong rapport with Di Maio.
"If there is no more point to continue with this government, then we will head to elections."
Di Maio also bemoaned the worsening ties and said the League's constant threats to quit the coalition had to stop. "If the League wants to topple the government, then it must say so clearly," he said in a video posted on Facebook.
Italian political commentators have long speculated that the window for a government collapse would close on July 20, because after that date any new election would be pushed too deep into the autumn to enable the 2020 budget to be approved -- key legislation around which the political calendar is built.
Italy has never held an election in the autumn or winter.
However, Salvini said there were no such restrictions.
"I don't believe in windows and I don't believe that we only have two or three days," he said in an interview with Corriere della Sera.
CALM MARKETS
Salvini is facing significant pressure from within his party to pull the plug on the government, which took office last June after an inconclusive national election, as League officials accused 5-Star of repeatedly thwarting their policy agenda.
The biggest frustration is focused on stalled efforts to hand greater autonomy to the regions -- something the League's northern strongholds have long demanded.
"Game Over. Don't they understand," foreign affairs ministry undersecretary and senior League politician Guglielmo Picchi wrote on Twitter.
Past turmoil in the government has immediately fed through to financial markets, with investors nervous that political instability could further damage Italy's fragile state accounts.
However, there was little sign of anxiety on Thursday, with Italy's bellwether 10-year bond yields hitting their lowest level in almost three years on Thursday, squeezing the gap on top-rated German bond yields to its tightest in over a year.
Hostility between the League and 5-Star intensified following European parliamentary elections in May when the League jumped above 5-Star to become the largest party in Italy. Support for it is now approaching almost 40 percent.
But Salvini has also come under pressure in recent days over allegations his party sought illegal funding from Russia to fund its successful EU election campaign -- a charge he has denied.
5-Star has called on Salvini to address parliament on the accusations, but in a peace offering, Di Maio said he did not believe the League had received any illicit cash from Moscow.
"If I had the slightest suspicion that the League had taken money from Russia, I would not be in government with them", he said on Thursday.